NOTICE u/s 131 of IT act - REPLY to be made

[Harish Swami]

My client was named by a third party who was trapped by ATS authorities during transporting old currency notes of 500 and 1000.

Summon issued by Department on reference issue.

Obviously Client should deny the onus or shall name further of the persons actually owner of the currency.

Can you suggest me better remedy?

[DR.MARIAPPAN GOVINDARAJAN]

Even if your client informs the name of the persons who are actual owners of the currency he is liable for penalty or punishment for having in possession of the said currency. You have to act according to the outcome of the summon proceedings.

[Harish Swami]

Thanks a lot Sir for your generous reply !

There was a important fact need to mention that the currency was trapped on 25.02.2017. By that time the notification to hold more then 10 notes was not in force.

"Prime Minister’s on November 8, 2016 and subsequent RBI notification that said people could deposit demonetized currency notes even after December 31, 2016 at specific RBI branches up to March 31, 2017 after complying with procedural requirements."

The Specified Bank Notes (Cessation of Liabilities) Bill, 2017, received the assent of the President on February 27 and has since then become a law. On Mar 1 2017 law as stipulated that the Holding of more than 10 notes of the junked ₹ 500 and ₹ 1,000 currency is now illegal, with a new law coming into effect after the President's assent.

DON'T YOU THINK THESE FACTS SOMEWHAT AFFECT YOUR VIEW ABOUT PENAL & PROSECUTION RESULTS.

With Due Regards

HARISH SWAMI

[DR.MARIAPPAN GOVINDARAJAN]

Any person was free to deposit the amount in the bank up to 31.12.2016. After that he may remit the amount with RBI explaining the reasons for failure to deposit the said amount in time. The Specific Bank Notes (Cessation of liabilities) Act, 2017 came into force with effect from 31.12.2016. Section 5 of the Act provides that on or after 31.12.2016 no person shall knowingly or unknowingly or voluntarily hold or transfer or receive any specified bank note. Section 7 provides that whoever contravenes the provisions of section 5 shall be punishable with fine which may extend to ten thousand rupees or five times the amount of the face value of the specified bank notes involved in the contravention, whichever is higher.

AI Summary

Client Faces Penalties Under Specific Bank Notes Act, 2017 for Holding Old Currency Despite Pre-Law Seizure Claim. A client was implicated by authorities for possessing old currency notes after being named by a third party caught transporting them. A summon was issued by the Income Tax Department. An advisor suggested that even if the client identifies the true owners of the currency, penalties or punishment could still apply. The client argued that the currency was seized before laws prohibiting possession of more than ten notes came into effect. The advisor clarified that while deposits were allowed until December 31, 2016, holding such notes after this date is illegal, with penalties outlined in the Specific Bank Notes Act, 2017.